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37th PARLIAMENT, 3rd SESSION

Standing Committee on Public Accounts

EVIDENCE

CONTENTS

Monday, March 29, 2004

1530

The Chair (Mr. John Williams (St. Albert, CPC))

1535

Mrs. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.)

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

1540

Mr. Dennis Mills (Toronto—Danforth, Lib.)

The Chair

Mr. Dennis Mills

The Chair

Mrs. Marlene Jennings

1545

The Chair

Hon. Walt Lastewka (St. Catharines, Lib.)

The Chair

Mr. Odina Desrochers (Lotbinière—L'Érable, BQ)

1550

The Chair

The Clerk of the Committee

The Chair

Mr. Vic Toews (Provencher, CPC)

The Chair

Mr. Vic Toews

The Chair

Hon. Walt Lastewka

1555

The Chair

Hon. Walt Lastewka

The Chair

Mr. Dennis Mills

The Chair

Mr. Vic Toews

The Chair

Mr. Vic Toews

The Chair

Hon. Walt Lastewka

The Chair

Mr. Vic Toews

The Chair

Mr. Vic Toews

The Chair

Mrs. Marlene Jennings

The Chair

1600

Hon. Walt Lastewka

Mrs. Marlene Jennings

Mr. Vic Toews

Mrs. Marlene Jennings

Hon. Walt Lastewka

The Chair

Hon. Robert Thibault (West Nova, Lib.)

1605

The Chair

Mr. Dennis Mills

The Chair

Hon. Shawn Murphy (Hillsborough, Lib.)

The Chair

Mrs. Diane Ablonczy (Calgary—Nose Hill, CPC)

The Chair

1610

Mrs. Marlene Jennings

The Chair

Mr. Vic Toews

Mrs. Marlene Jennings

Mr. Vic Toews

The Chair

1615

Mrs. Marlene Jennings

The Chair

Mr. Jason Kenney (Calgary Southeast, CPC)

The Chair

Mrs. Diane Ablonczy

1620

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

Hon. Walt Lastewka

The Chair

Hon. Walt Lastewka

The Chair

Mr. Rob Walsh (Law Clerk and Parliamentary Counsel, House of Commons)

The Chair

Mr. Rob Walsh

The Chair

1625

Mr. Rob Walsh

The Chair

Hon. Walt Lastewka

The Chair

Mr. Vic Toews

The Chair

Mr. Dennis Mills

The Chair

Mr. Dennis Mills

Mrs. Marlene Jennings

The Chair

Mr. Alan Tonks (York South—Weston, Lib.)

The Chair

1630

Mr. Alan Tonks

The Chair

Mr. Alan Tonks

The Chair

Mr. Alan Tonks

The Chair

Mr. Dennis Mills

The Chair

Mr. Dennis Mills

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

Mr. Rob Walsh

1635

The Chair

Mr. Alan Tonks

The Chair

Mr. Jason Kenney

The Chair

Hon. Walt Lastewka

The Chair

Hon. Walt Lastewka

The Chair

Mrs. Marlene Jennings

The Chair

Mr. Rob Walsh

The Chair

1640

Mr. Dennis Mills

The Chair

Hon. Joe Jordan (Leeds—Grenville, Lib.)

The Chair

The Clerk

Mr. Dennis Mills

The Chair

Mr. Dennis Mills

The Chair

The Clerk

The Chair

Mr. Dennis Mills

1645

The Chair

The Clerk

The Chair

Mrs. Diane Ablonczy

The Chair

Mrs. Diane Ablonczy

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Diane Ablonczy

The Chair

Mrs. Marlene Jennings

The Chair

Hon. Robert Thibault

The Chair

1650

Ms. Beth Phinney

The Chair

Ms. Beth Phinney

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

Mr. Vic Toews

The Chair

Mrs. Marlene Jennings

1655

Mr. Vic Toews

The Chair

Mrs. Marlene Jennings

The Chair

Mrs. Marlene Jennings

The Chair

1700

The Chair

Mr. Dominic LeBlanc (Beauséjour—Petitcodiac, Lib.)

The Chair

Mr. Dominic LeBlanc

The Chair

Ms. Beth Phinney (Hamilton Mountain, Lib.)

Mr. Norman Steinberg (Director General, Audit and Ethics Branch, Department of Public Works and Government Services)

Ms. Beth Phinney

Mr. Norman Steinberg

Ms. Beth Phinney

1705

Mr. Norman Steinberg

Ms. Beth Phinney

Mr. Norman Steinberg

Ms. Beth Phinney

Mr. Norman Steinberg

Ms. Beth Phinney

Mr. Norman Steinberg

Ms. Beth Phinney

Mr. Norman Steinberg

Ms. Beth Phinney

Mr. Norman Steinberg

Ms. Beth Phinney

Mr. Norman Steinberg

Ms. Beth Phinney

Mr. Norman Steinberg

Ms. Beth Phinney

Mr. Norman Steinberg

Ms. Beth Phinney

Mr. Norman Steinberg

Ms. Beth Phinney

Mr. Norman Steinberg

1710

Ms. Beth Phinney

Mr. Norman Steinberg

Ms. Beth Phinney

Mr. Norman Steinberg

Ms. Beth Phinney

Mr. Norman Steinberg

Ms. Beth Phinney

Mr. Norman Steinberg

The Chair

Ms. Beth Phinney

The Chair

Mrs. Marlene Jennings

Mr. Norman Steinberg

1715

Mrs. Marlene Jennings

Mr. Norman Steinberg

Mrs. Marlene Jennings

Mr. Norman Steinberg

Mrs. Marlene Jennings

The Chair

Mr. Dennis Mills

Mr. Norman Steinberg

Mr. Dennis Mills

Mr. Norman Steinberg

Mr. Dennis Mills

Mr. Norman Steinberg

The Chair

Mr. Dennis Mills

Mr. Norman Steinberg

Mr. Dennis Mills

Mr. Norman Steinberg

1720

Mr. Dennis Mills

The Chair

Mr. Dennis Mills

Mr. Norman Steinberg

The Chair

Hon. Robert Thibault

Mr. Norman Steinberg

Hon. Robert Thibault

Mr. Norman Steinberg

Hon. Robert Thibault

Mr. Norman Steinberg

Hon. Robert Thibault

Mr. Norman Steinberg

Hon. Robert Thibault

1725

Mr. Norman Steinberg

Hon. Robert Thibault

Mr. Norman Steinberg

Hon. Robert Thibault

Mr. Norman Steinberg

Hon. Robert Thibault

Mr. Norman Steinberg

Hon. Robert Thibault

Mr. Norman Steinberg

Hon. Robert Thibault

Mr. Norman Steinberg

1730

The Chair

Mr. Norman Steinberg

The Chair

Mr. Norman Steinberg

The Chair

Mr. Norman Steinberg

The Chair

Mr. Norman Steinberg

The Chair

Mr. Norman Steinberg

The Chair

Mr. Norman Steinberg

The Chair

Mr. Norman Steinberg

The Chair

Mr. Norman Steinberg

The Chair

Hon. Robert Thibault

The Chair

Ms. Beth Phinney

The Chair

Mr. Jason Kenney

1735

The Chair

CANADA

Standing Committee on Public Accounts

NUMBER 017

3rd SESSION

37th PARLIAMENT

EVIDENCE

Monday, March 29, 2004

[Recorded by Electronic Apparatus]

¹ (1530)

[English]

The Chair (Mr. John Williams (St. Albert, CPC)): I call the meeting to order.

The orders of the day are as I mentioned this morning.

There are three issues I wish to deal with before we return to Mr. Steinberg. The first is communications from Mr. Edelson, the lawyer for Mr. Chuck Guité; second, I want to talk about the agenda for Thursday; and third, I want to deal with these motions that have been circulated. Then we'll get back to Mr. Steinberg.

First, with regard to Mr. Edelson, the lawyer for Mr. Guité, there has been some correspondence. Let me read it. It is in only one language here, but I think it has been translated. It's to the Standing Committee on Public Accounts, Attention Jeremy LeBlanc.

Dear Sir:

RE: Charles Joseph Guité.

Further to our telephone discussion yesterday, I wish to confirm the following details:

^ç

1. Mr. Guité will be on vacation past the April 1st date referred to in the Summons which was delivered to my office. I can advise you that these plans were made many months ago and cannot be changed. Additionally, Mr. Guité has to attend to a legal / contractual obligation in the United States prior to his return to Canada.

^ç	2. I will be out of the country between April 9 and April 15, 2004. There is no possible way that Mr. Guité and myself will be meeting to discuss the summons to appear before the Committee prior to my return.

^ç

3. I also indicated to you my concerns with respect to the protocol that would apply if Mr. Guité was to return to give evidence before the Committee. I reminded you that the Committee was originally convened to hear his evidence in-camera on the condition that it would not be disclosed to the public for three years. There was a clear legal purpose accomplished by the protocol, namely, none of the evidence would be available to the R.C.M.P. who were carrying on a parallel investigation. Meanwhile, the Committee would have the benefit of his evidence for the purposes of making their own determinations concerning the issues before it. I suggested that you have Mr. Walsh telephone me in order that we could discuss the applicable protocol if Mr. Guité was to return to testify before the Committee. As the R.C.M.P. investigation is still on-going, it is clear that the same concerns prevail today as did at the time of his original evidence.

I look forward to receiving a communication from Mr. Walsh or his associate so that I can provide informed advice to Mr. Guité concerning this issue.

Yours very truly,

Michael D. Edelson.

That is dated March 24.

On March 26 there is a letter, privileged and confidential, to Mr. Michael D. Edelson, signed by Mr. R. R. Walsh, our law clerk:

Dear Mr. Edelson:

RE: Guité appearance before the Public Accounts Committee.

I have been instructed by Mr. John Williams, M.P., Chair of the Standing Committee on Public Accounts, to respond to your letter of March 24, 2005 to the Committee (Attention: Jeremy LeBlanc).

--I expect that date is a typo--

Please be advised that your letter will be presented to the Committee on Monday, March 29, 2004. It is not anticipated that the Committee will change the date scheduled for Mr. Guité's appearance before the Committee as indicated in the summons.

Yours truly,

R. R. Walsh.

With a copy to me and a copy to Mr. Jeremy LeBlanc.

There is now another letter dated March 29, which is today. Again it is addressed to the Standing Committee on Public Accounts, attention Mr. Rob Walsh.

Dear Sir:

RE: Charles Joseph Guité.

Further to our meeting this morning outside of the Committee Room with Committee Chair, John Williams, Vice-chair, Ms. Jennings and yourself, I wish to confirm the following details with you:

^ç

1. Mr. Guité was requested to waive the confidentiality of the in-camera hearings at which he testified in 2002. This waiver was linked to an agreement by him instructing me to proceed in this fashion. I was able to contact Mr. Guité in the United States and he provided me with instructions to waive the confidentiality of the in-camera hearings. You have advised me that this testimony will, however, still be bound by Parliamentary privilege and cannot be utilized for or in any third party proceedings.

^ç

2. Mr. Guité has agreed to attend to provide testimony before the Committee on April 22, 2004 and April 23, 2004, if the Committee is sitting on this latter occasion. If he is required to testify at a subsequent hearing, he will attend at a date to be arranged which is convenient for himself and legal counsel.

^ç

3. Mr. Guité's agreement to waive confidentiality is contingent upon the committee's agreement to accommodate his travel schedule and the time necessary to meet with legal counsel prior to testifying. Should these dates be altered to a time frame when either Mr. Guité or myself are unavailable, we would withdraw the waiver of confidentiality.

I believe this captures the terms of our agreement, please advise if you have any further comments in reply.

Yours very truly,

Michael D. Edelson.

¹ (1535)

These documents are tabled.

I'm first going to ask Ms. Jennings if she concurs when Mr. Edelson says “I believe this captures the terms of our agreement”.

Mrs. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): I do; it does.

The Chair: We expect Mr. Guité will now appear on April 22 and 23, and he has agreed that the 2002 testimony will be made public.

Are you familiar with this motion, Madam Jennings?

Mrs. Marlene Jennings: No. Which motion are you talking about?

The Chair: I saw several motions this morning dealing with making his evidence public. Is that what you want to deal with at this time?

Mrs. Marlene Jennings: I was going to suggest, given Mr. Guité's agreement to waive confidentiality of his 2002 in camera testimony and given that he's agreed to provide testimony before the committee on April 22 and April 23, 2004, that this committee agree, one, to hear from Mr. Guité on April 22 and 23, 2004, and two, to render public Mr. Guité's 2002 testimony forthwith--immediately.

The Chair: There are two situations. One is calling for Mr. Guité on April 22--

Mrs. Marlene Jennings: May I make a little clarification? I suggest that the summons be modified to show that Mr. Guité is being summoned for April 22 and 23, 2004, rather than for April 1, 2004.

The Chair: So we have two issues here: one, we change the date of the summons; two, we release the documentation of the testimony.

Now, I will just give you some advice on the release of the testimony. I tabled a letter from the Clerk of the House of Commons, Mr. William Corbett, stating that it requires an order of the House in order to release the testimony.

I have also taken the position that since we agreed and made a commitment that the information would not be released for a period of three years, even though we have the agreement of Mr. Guité to release the testimony--on whatever basis that was given is a matter of conjecture, but nonetheless we made a commitment--we should not overturn that readily or easily. Otherwise, if the House of Commons can change its mind on a whim, we may have some serious problems.

There was apparently a precedent back in 1978--I don't know the details surrounding that precedent--where in camera testimony was made public. At that time the House authorized the particular committee to dispose of the evidence as they saw fit, which included making it public.

I believe this time, because the circumstances are similar but different, different in the fact that we made a commitment that it would be secret for three years or longer if criminal charges were laid, that rather than seeking the House's delegation of that decision to us, we ask the House to make the decision. There's a subtle difference.

Mr. Mills.

¹ (1540)

Mr. Dennis Mills (Toronto—Danforth, Lib.): Mr. Chair, I think that because Mr. Guité's counsel here has said that Mr. Guité has agreed to waive the confidentiality, this is totally different from this committee attempting to overturn the agreement as to in camera testimony without his consent.

The Chair: I didn't say at all that it was without his consent, Mr. Mills. I just said that we on our side made a commitment and that Mr. Guité spoke to the committee on the basis of that. Now Mr. Guité has changed his mind and allowed the publication, but the Clerk of the House of Commons has said that notwithstanding Mr. Guité's permission, it still requires an order of the House.

Now, in the precedent in 1978, under circumstances similar but not identical, the House delegated the decision to the particular committee. I believe, because we made a commitment, that if we now reneged on it, albeit with the agreement of the other side, rather than asking the House--

Mr. Dennis Mills: That's not reneging, sir.

The Chair: Well, it doesn't matter.

Nonetheless, rather than ask the House to delegate that decision to us, I suggest we ask the House to make the decision. The end result may be identical. But we must concern ourselves about precedents, and this is a serious precedent if we take it upon ourselves, after making an agreement, to decide we are the ones who can break that agreement, This is why I think it's appropriate that the House make the decision, rather than our asking the House to delegate to us the reversal of our own decision. It's semantics perhaps, but I think it's an important precedent.

Madam Jennings.

Mrs. Marlene Jennings: May I begin by saying, Mr. Chair, I do not agree with you. May I add that the 1978 precedent to which you made reference was a House order, yes, and it gave authority to the committee to dispose of all the evidence, including in camera evidence, testimonial, and documentary evidence, as it saw fit and to attach whatever conditions it wished to.

In this particular case, the legal counsel of Mr. Guité clearly states that two years ago, in 2002, there was an agreement, there was a protocol that was negotiated between the public accounts committee and Mr. Guité and his legal counsel that he would come before the committee and give evidence on the condition that the committee hold its hearing in camera and agree not to publish his testimony for three years.

Regarding the letter that you yourself just read, dated March 24, which is signed by Michael D. Edelson, legal counsel to Mr. Guité, I draw your attention to the third point, the last sentence, which says, “There was a clear legal purpose accomplished by the protocol, namely, none of the evidence would be available to the R.C.M.P. who were carrying on a parallel investigation.”

Now, if we come to the letter that Mr. Edelson-- again, legal counsel to Mr. Guité--has written, dated March 29, he says that Mr. Guité has agreed to waive the confidentiality of the in camera hearings. There were two parties to that agreement: Mr. Guité and the committee. Mr. Guité requested that the hearings be held in camera in 2002 and that there be non-publication in order that the evidence not be available to the RCMP while they conducted a parallel investigation. Fast forward to March 29, 2004, and Mr. Guité not only says he is prepared to come and testify in a public hearing on any issue pursuant to Standing Order 108(3)(g), chapters 3, 4, and 5 of the Auditor General's November 2003 report, tabled February 2004, but he says in order to ensure that this committee can do its work properly, he is waiving the confidentiality; he lifted the confidentiality of his testimony in 2002.

For the committee to agree to do so is not reneging on that agreement; it is that both parties have come to a new agreement on it, both parties agree to it. Given that the in camera testimony and its non-publication was not for the benefit of this committee, but was for the benefit of Mr. Guité, if Mr. Guité, with full legal counsel, decides that he is willing to forgo that benefit while still enjoying parliamentary privilege, it is not up to this committee to refuse his request. That is his request; he is requesting that it be waived.

Now, in terms of the 1978 House order, it is completely different because in that case the in camera and non-publication--well, it wasn't even non-publication, it was in camera--was at the decision of the committee; therefore, it was not at the request of some witness, and there was not a non-publication order at the behest and bequest of a witness.

You have two parties to this: Mr. Guité and the committee. Mr. Guité now says he does not wish his testimony not to be public.

¹ (1545)

The Chair: The speaking list is Mr. Lastewka, Mr. Desrochers, Mr. Toews, but first I'll make a quick response to Madam Jennings.

I do recall back in 2002 that we were quite concerned about the effect that public privileged testimony may have on a police investigation. I think I'm quite sure in saying that we were the ones who decided to do it in camera and it was not at the request of Mr. Guité. We did not want to prejudice the police investigation.

Mr. Lastewka, Mr. Desrochers, Mr. Toews.

Hon. Walt Lastewka (St. Catharines, Lib.): I'll be very short.

I think the work that you and Ms. Jennings did this morning, and confirmed by Mr. Edelson in this letter dated March 29, as far as I'm concerned allows the committee to get on with its work. There shouldn't be any delays and we need not get the House involved with this committee business. We should proceed unless the legal counsel--and I would ask him this--has any contrary advice.

[Translation]

The Chair: Mr. Desrochers, please.

Mr. Odina Desrochers (Lotbinière—L'Érable, BQ): I would like to remind you of certain facts, Mr. Chair. This decision was made in the summer of 2002 so that Mr. Guité could appear as a witness. Furthermore, the RCMP was investigating on the same issue. Thus I find it inappropriate to reopen that document because if that evidence was heard in camera at the time, it was because of a parallel investigation by the RCMP. There might be an investigation on Groupaction; only the future will tell.

We have debated that issue and I totally agree with you. What is done is done. Groupaction is one thing and the auditor general report is another matter. There were liberal members on that committee. Their colleagues only need to ask them what Mr. Guité said.

Mr. Guité’s counsel has given us specific dates as if it was up to him to decide. “I am ready to come but only on such dates”, said he. How long ago have we notified him, Mr. Chair? When did we contact Mr. Guité for the first time?

¹ (1550)

[English]

The Chair: I don't recall the exact dates.

Mr. LeBlanc, can you tell us what happened?

The Clerk of the Committee: Thank you, Mr. Chairman.

The committee adopted a motion inviting Mr. Guité and Mr. Tremblay to appear at some point in March. The date that motion was adopted was March 11. Subsequent to that we made efforts to try to locate Mr. Guité. We received a letter from Mr. Edelson on a somewhat related topic, and discovering that he was Mr. Guité's counsel, apprised him of the committee's decision to hear Mr. Guité at some point in March 2004. So it would have been around March 11.

The Chair: Then we issued the summons, what, a week past Friday or two weeks past Friday? The weeks pass so fast I have a hard time remembering. Anyway, it was about a couple of weeks ago that we issued the summons to Mr. Guité and served it on his lawyer, Mr. Edelson.

Now, Mr. Toews.

Mr. Vic Toews (Provencher, CPC): Thank you.

I think this discussion regarding a transcript is somewhat academic. We have here the commitment of Mr. Guité and his counsel to appear before this committee. He's going to appear here April 22 and April 23. Transcript evidence in any proceeding is only used when the witness is not available. When you have the primary viva voce evidence here, you don't rely on transcript evidence and so it's not necessary to call that transcript evidence. We have a firm commitment.

Speaking as a former practising lawyer, I think the impact of a witness before a committee, of course, is very different where you can observe the demeanour of the witness. I've never had an opportunity to see the demeanour of this particular witness and to test the veracity of his statements. I want to see this witness here and I want to be able to test his statements, what he tells us today. I think it's very important, Mr. Chair.

Why is there such an eagerness to have this transcript? I'm very puzzled that we would take the second-best evidence when we have the best evidence available to us.

Mr. Chair, I'd like, of course, to see the clerk's ruling. You've indicated the clerk has made a ruling in that respect.

The Chair: Actually, we have sent someone to the clerk's office to see if we can get another copy of the letter. She will be here momentarily.

Mr. Vic Toews: My suspicion--and I want to see the clerk's ruling--is that this has nothing to do with pushing forward the agenda of this committee, Mr. Chair. This has everything to do with pushing forward the agenda of the government.

You might call me a prophet in this respect, but I know without a shadow of a doubt that what's going to happen is that this testimony is going to be brought forward here in the paper form. They will then try to morph this report, which is just a summary of the evidence, which we all agreed would just be a summary of the evidence and no recommendations, but then they'll try to include Mr. Guité's conclusions in that. Then what they will do is call an election, before--

Call me a prophet, but I have seen these kinds of scams before, Mr. Chair. This is a scam, and this is an abuse of the committee process.

The Chair: Mr. Lastewka has a point of order.

Hon. Walt Lastewka: On a point of order, Mr. Chairman, we're debating on the issue of the letter that has been submitted by Mr. Guité's lawyer, not on all of the rest of the hearsay and prophets that Mr. Toews wants to present. I object very strongly to that.

We have a letter in our favour. I find it very interesting that the opposition, all of a sudden, does not want to bring forward information. I find it surprising. Maybe it's because of what I've heard or seen in the newspaper, something about manipulating the media.

¹ (1555)

The Chair: What's your point of order, Mr. Lastewka?

Hon. Walt Lastewka: The point of order is that he's right off topic on the letter we're discussing on the table, which is the March 29 letter and what you and Ms. Jennings agreed on.

The Chair: Just a moment. We have a point of order by Mr. Lastewka.

We're dealing with the issue of, should we, and if so, how would we make public the testimony that was received in camera two years ago. That is the discussion. Mr. Toews is putting forward his arguments as to why...and I think he's arguing that it should not be made public, but he will get to that point, I'm sure.

But it's a legitimate point. He's trying to put forth his arguments on why he supports his position, which he will make.

The point of order--

Mr. Dennis Mills: On a point of order, he's claiming to be a prophet with election dates and everything else. This is getting ridiculous.

The Chair: Continue on, Mr. Toews, without too much prophecy, by the way.

Mr. Vic Toews: I might be wrong, then, Mr. Chair. I'm not opposed to bringing forward the transcript at the same time as the viva voceevidence is brought forward.

What possible--

The Chair: Could you explain viva voce, please.

Mr. Vic Toews: When the witness actually appears here, live before us, I have no objection to releasing the transcript at exactly the same time. That will prove, then, that I was wrong in suggesting that it's just a Liberal scam.

An hon. member: [Inaudible—Editor]

Mr. Vic Toews: I've been very polite. I haven't interrupted them.

The Chair: Mr. Lastewka, a point of order.

Hon. Walt Lastewka: On a point of order, Mr. Chairman, the discussion on the table, after your remarks, is whether this committee has to go to the House to get approval or whether this committee is on its own. That's the discussion that's on the table, and I think we should stay to that.

The Chair: Mr. Lastewka, my remarks were two points. I said, does the committee want to, and if they do, how? There are two points to be debated. Mr. Toews is talking about, do we want to?

Continue on, Mr. Toews.

Mr. Vic Toews: Mr. Chair, if I am wrong in my suggestion that this is just a scam to get the transcript evidence first and then never call Mr. Guité, then before an election--

Some hon. members: Oh, oh!

Mr. Vic Toews: Mr. Chair, if I can just--

The Chair: I do ensure that the government side gets attention and the floor, and they can afford the same respect to other members.

Mr. Toews, please.

Mr. Vic Toews: As I was saying, in order to ensure that there aren't some untoward motives, if I can use that expression, that this isn't a suggestion that we get the transcript first without the intention of calling the witness in person before the election is called, I don't have any difficulty in saying let's open up that transcript when we call the witness. But there seems to be a fear here, Mr. Chair, of actually calling the witness. I would like to see the witness here and indeed cross-examine that witness on his prior statements.

The Chair: Thank you, Mr. Toews. I'm not going to continue on this.

We have Ms. Jennings, Mr. Lastewka, Mr. Thibault. Is there anybody else? I'm going to cut it off. Is there anybody else? Mr. Mills.

Then I will cut it off. Ms. Jennings said she wanted to speak, so did Mr. Lastewka, so did Mr. Thibault and now Mr. Mills.

Mrs. Marlene Jennings: No, I'm on the second time.

Mr. Chair, I would like to make one point.

[Translation]

I have something to say now and I might have something else to add later.

Mr. Chair, it is true, as it is mentioned in today’s letter from Mr. Edelson , that we met, you and me, with Mr. Edelson our legal counsel and parliamentary advisor, Mr. Walsh, being also present. Mr. Edelson undertook to ask his client permission to release his 2002 testimony and you did agree at that time, Mr. Chair. You said that there was no problem and that if Mr. Guité agreed, the committee would make his testimony public. So, I find a bit strange that, today, we the liberals are accused of being fearful. If there is a fear, it rather seems to be felt on the other side.

I shall digress a little as did Mr. Toews. I am always reluctant to do that, but after hearing Mr. Toews accusations, I shall return the ball in his court. Mr. Chair, you gave your consent to Mr. Edelson when you told him that, if Mr. Guité accepted to waive confidentiality, this committee would make his testimony public immediately. Then I heard several opposition members, including you Mr. Chair, say that it cannot be done, even if Mr. Guité who is the one, who asked for confidentiality two years ago, now says that he wants to waive it. If there is any fear, it might be among opposition members who had the opportunity to hear Mr. Guité or to read his in camera testimony if they were not here in 2002. They do not want this evidence to be made public. Canadians should ask themselves why Conservative members and Bloc Quebecois members are afraid to have Mr. Guité’s testimony released today. It is a good question, Mr. Chair.

[English]

The Chair: Just a minute. We had some prophecies by Mr. Toews on this side, and we had Madam Jennings speaking on behalf of this side, so I think we'll call it quits at this point in time.

We're now going to hear from Mr. Lastewka, Mr. Thibault, Mr. Mills, and Mr. Murphy, and that's it. There are no more.

º (1600)

Hon. Walt Lastewka: Mr. Chair, I haven't read Mr. Guité's in camera report, but I will now.

Mrs. Marlene Jennings: To find out why the opposition doesn't want it public.

Mr. Vic Toews: I've never read it.

Mrs. Marlene Jennings: I have.

Hon. Walt Lastewka: My point of order was that we were talking about the decision to take it to the House or not take it to the House. The rest was added on. My opinion was, very strongly, with the negotiations this morning and with the letter confirming it, the committee should give its own destiny and not have to go to the House, unless our legal counsel has anything contrary to that, and I haven't heard from the legal counsel in the discussion.

The Chair: In answer to that point, Mr. Lastewka, while the lawyer for Mr. Guité, Mr. Edelson, did say he would seek his permission, and has got it, for Mr. Guité to release this information, it has always been my position, as you may recall from previous meetings, that I do not want us to go back on our word lightly. I didn't say it couldn't be done, but not lightly. I made no commitment at all to Mr. Edelson, other than saying the committee would decide. I can't make decisions on behalf of the committee. I said I'd bring it to the committee, and here we are.

There are two issues. Will the committee decide to make it public, and if that decision is affirmative, on what basis will it be done?

Mr. Thibault.

Hon. Robert Thibault (West Nova, Lib.): Thank you, Mr. Chairman.

This has put you in a difficult position, I understand that. I would be in favour of the committee's releasing the transcript. I think it would be very useful for me too. It in no way replaces testimony viva voce by Mr. Guité; I look forward to his appearing. I intend to question him probably on a different line from the one I will find in the transcript, because I would assume that what he has testified remains the same.

We've heard this morning members opposite passing judgment on the credibility of certain witnesses who have come forward. I think that is unrealistic and unhelpful. I don't think we should make the decisions until we've heard all the evidence, but all the evidence that is available should be used as a tool. That transcript is available. You've reached an agreement with him, as with our members, that it be available to us. I believe we should avail ourselves of it.

º (1605)

The Chair: Mr. Mills, Mr. Murphy, then that's it.

Mr. Dennis Mills: Mr. Chair, I will be brief.

If there is one person over this last three months who has been vilified in every part of our country, it is Mr. Chuck Guité. One of the reasons I have been very frustrated with this process is the fact that this testimony he gave two years ago was in fact in camera. That has caused me at times to have doubts about a man I did work with in what I considered to be a very constructive way. I couldn't understand why his testimony was shrouded. This man is saying to the people of Canada today, through this committee, that the testimony that was in camera may be released. I think we have a duty, not only to this committee but to all Canadians, to make that testimony public as soon as possible.

The Chair: Mr. Murphy.

Hon. Shawn Murphy (Hillsborough, Lib.): Thank you, Mr. Chairman.

I don't see the big issue here. I was on the committee two years ago. We went in camera, the transcript was held confidential. Mr. Guité has come forward through his lawyer and has waived that. By implication, he's really asked that it be released. I'm perplexed as to why we just don't go ahead and release it, as per his agreement and request.

As far as the opposition is concerned, we had a motion last week to table and make public every personal, private, business, ministerial, and political phone conversation on record from every minister who has served in the government since 1993. That was okay; no one seemed to have a problem with it. With this issue, they have a problem. I'm totally perplexed.

I do agree with Mr. Toews on the point that the viva voce evidence of the witness is the evidence we're dealing with here. The question is, what relevance? This was in another hearing, it involved the three Groupaction contracts. As for whether the media would take it or not, it's hard to speculate right now as to what's going on. Again, I think it would be most useful if there's a conflict, but if there's no conflict, I question the whole relevancy of the transcript.

Let's get on with it. Let's abide by the wishes of Mr. Guité. I would like to move that the testimony be released publicly, immediately, as per the wishes of Charles Guité.

The Chair: Madam Ablonczy, a point of order.

Mrs. Diane Ablonczy (Calgary—Nose Hill, CPC): I would like to have a ruling on the fact that the evidence we're discussing was given in camera. As a lawyer, I can tell you that evidence taken in camera has a different weight from evidence given in an open court or an open hearing. We're proposing to treat this in camera testimony on the same basis as information provided to us in an open forum by the witness in person. It seems to me that we would be very remiss in not defining exactly what weight can be given to this different type of evidence.

Perhaps the law clerk could be of assistance to us, or perhaps in some other way you could rule on that, Mr. Chairman.

The Chair: I don't think I'm capable of ruling on the weight to be applied to evidence received in camera and subsequently released. Since we are dealing here with governance, not a court of law, it would seem that there can be no differentiation in the weight given to one and the other form when it's reported to Canadians. The subtle distinctions cannot be carried forward, so in the public opinion, there would be no difference between what is reported from the information gleaned from the in camera testimony and any other testimony.

Before we go ahead, I'm going to give you the chair's advice. The committee may take it or it may leave it. I also will refer to two notices of motion. I hadn't realized that we actually had two motions that were filed by Ms. Jennings and are properly before the committee. I will read these motions first.

One is that the evidence received by the Standing Committee on Public Accounts in relation to a study of the report of the Auditor General of Canada dated May 8, 2002, on Groupaction Communications during the first session of the 37th Parliament be deemed received by the committee in the current session. The rationale for the motion is that the testimony does not belong to this committee; it belongs to a previous session of Parliament. It is quite common for evidence from a previous session to be adduced--I believe that's the word--and be brought forward and be properly before this committee. So nothing can happen with that evidence until this motion is passed.

The second motion by Ms. Jennings is that this committee request the House of Commons to issue a House order stating that the committee has the authority to make public and dispose of....

Madam Jennings.

º (1610)

Mrs. Marlene Jennings: I have already informed you that I would not be moving the second motion, so there is no reason to--

The Chair: Okay, my apologies.

Mr. Toews, on a point of order.

Mr. Vic Toews: What is the second motion, since you've read half of it into the record?

Mrs. Marlene Jennings: I said I have not moved it, and it's not going to be debated until I move it.

Mr. Vic Toews: I think we need to have on the record what she wanted this committee to do. You've read half of it, Mr. Chair. It would be proper to read the rest.

The Chair: There is a 48-hour notice of motions before this committee. Any motions that are properly before this committee must have been distributed to all members for 48 hours, so it cannot be that they're withheld and cannot be properly before all members. I can read them, and we can defer the vote to a different time, until they are moved. I'm just saying these are the notices of motion I have.

Let me read it: “That the committee request the House of Commons to issue a House order stating that this committee has the authority to make public and dispose of, as it sees fit, in camera evidence received by the Standing Committee on Public Accounts in relation to its study of the report of the Auditor General of Canada dated May 8, 2002, on Groupaction Communications during the first session of the 37th Parliament.”

These are motions for which notice has been given.

I also have a copy of the letter dated March 24 from Mr. Corbett, who is the Clerk of the House, to Ms. Marlene Jennings, with a copy to me as the chair of the standing committee. I'm going to read the last two paragraphs. This deals with making the evidence public:

A precedent that relates indirectly to this circumstance dates back to 1978, when, by House order, a committee was allowed to make available to a commission of inquiry in camera evidence heard during an earlier Parliament and to impose on the commission any condition that it wished. The committee then adopted a motion to make the documents available to the commission of inquiry for examination in camera and required those documents to be returned at the end of the examination.

The documents never did become public. These were in camera documents that we gave to an inquiry and said it could look at them in camera and bring them back to us.

It continues:

In view of the actions of the House in 1978 and in the absence of other precedents suggesting other options, it would appear prudent for the Standing Committee on Public Accounts to seek a House order should it wish to make public in camera evidence from a previous session.

We're dealing with precedents, and we've gone back to 1978 here and found, in essence, the only precedent we have that gives guidance for future rulings and decisions by committees and the House of Commons. So we should act carefully and with consideration. My recommendation is that if we decide we want the information to be made public, this committee, having made the first decision, should not make the second decision, but should seek that the House make that decision on our behalf. That is my recommendation to the committee if it wishes to make that information public.

Madam Jennings.

º (1615)

Mrs. Marlene Jennings: I would simply like to point out for the information of all members of the committee that the letter of the Clerk of the House to me predates the agreement with Mr. Edelson, based on his client's instructions today. The notice of motion asking the House to issue a House order allowing us the authority to make public and dispose of as we see fit in camera evidence received by the public accounts committee in 2002 predates today's agreement. That motion, for the information of anyone who wishes to listen, was based on the possibility or the premise that Mr. Guité would not wish to appear, would refuse to appear, or simply would not appear. Therefore, it would allow this committee the authority, contrary to Mr. Guité's wishes, to render it public. However, Mr. Guité has agreed to lift the seal of confidentiality. I would note that if Mr. Guité had a copy of his own testimony, he could today make it public for everyone.

So I would urge the members of this committee to decide that this committee will indeed ratify Mr. Guité's request that we lift the seal of confidentiality and make his 2002 testimony public immediately.

The Chair: Thank you very much, Ms. Jennings.

I want to point out that the House does not bend to any one individual Canadian. The House decides for itself based on what the House feels it wants, not on the basis of somebody coming to Parliament saying, can you do this or that for me? I'm not arguing either for or against; I'm just saying that if we are to make the information public, we should request the House to make the decision, not us. That's all.

Mr. Kenney.

Mr. Jason Kenney (Calgary Southeast, CPC): In light of Madam Jennings' latest intervention, it seems to me, Mr. Chairman, the prudent thing would be, given Mr. Edelson's letter of today, to write to the Clerk of the House of Commons seeking his advice on whether we would be overturning precedent and creating a troublesome precedent for the future. I would like to know.

This is a very serious matter. I came into this meeting this afternoon not knowing about this issue. It shouldn't be partisan football, though, of course, everything that happens in this committee is going to have a political dimension. We have an opinion from the Clerk of the House of Commons here about a very important legal precedent that we could be setting, and I think we shouldn't lightly overturn it. Madam Jennings has said new information has come to light, namely Mr. Guité's conditional willingness to unseal the evidence. Based on that, I would ask that we seek either a formal opinion from legal counsel or an opinion from the Clerk of the House.

I further would like to give notice of motion, Mr. Chairman, that this committee request the House of Commons to issue a House order stating that this committee has the authority to make public and dispose of, as it sees fit, in camera evidence received by the Standing Committee on Public Accounts in relation to its study of the report of the Auditor General of Canada dated May 8, 2002, on Groupaction Communications during the first session of the 37th Parliament.

The Chair: Can you deliver that to the clerk, please? You're reading it. Do you have it in both languages?

Ms. Ablonczy.

We'll get to your motions, Madam Jennings. They are properly before us.

Mrs. Diane Ablonczy: Further to that, Mr. Chairman, it does trouble me considerably that you have a witness, the key witness, or one of the key witnesses, in this whole sponsorship program, making deals with the committee, prepared to waive certain things if we're prepared to delay his appearance before the committee for a considerable period of time, in spite of the fact that he's been summoned to appear at a more reasonable time. I think, Mr. Chairman, this is something that involves the whole House. We not only have the House having given Mr. Guité certain considerations before, but now he's trying to use those as a bargaining chip with a committee of the House. I think this needs to be considered by the whole House in light of all of the parameters of the situation.

º (1620)

The Chair: You've heard all the arguments. We'll now proceed first with Madam Jennings' motion, which is to adduce the evidence from the session previous to this. Are you all comfortable with that motion? I'm going to call the question. Any debate?

Mrs. Marlene Jennings: I would like a recorded vote, please.

(Motion agreed to: yeas 16; nays 0)

The Chair: The evidence is now before us. The question is, what are we going to do with the evidence that is now before us?

Before you go ahead, Ms. Jennings, I think Mr. Kenney raised a serious point, that we should seek an opinion from the Clerk of the House of Commons.

Mrs. Marlene Jennings: Mr. Chair, I have a notice of motion.

The Chair: I know you have a notice of motion, Madam Jennings, but I want to deal with Mr. Kenney's serious point; we have to think about it.

Mrs. Marlene Jennings: No. You've accepted a notice of motion from Mr. Kenney.

The Chair: I haven't. Let me continue on, Madam Jennings.

We have a serious issue raised by Mr. Kenney about the effects of a precedent down the road; we have no idea of when or in what circumstances this may be used as a precedent for releasing information at a later date. My question is, do you want to continue discussing this issue? If you say yes, then we will deal with Madam Jennings' notice of motion. If you say no, you don't want to proceed, then I'll get a ruling from the Clerk of the House of Commons. Is it the feeling of the committee that we should proceed on it?

Mr. Lastewka.

Hon. Walt Lastewka: I know you mentioned that Mr. Kenney's motion was very important and so forth, but--

The Chair: It wasn't a motion. I think it was a caution more than a motion.

Hon. Walt Lastewka: If you remember correctly, when I had my chance to speak the first time, I asked the same thing of our legal counsel.

The Chair: Let's see what Mr. Walsh has to say.

Mr. Rob Walsh (Law Clerk and Parliamentary Counsel, House of Commons): Mr. Chair, if I could, I'll first clarify another point related to this. The discussion among the members has been with regard to how the committee might go about effecting publication of Mr. Guité's in camera testimony. Notwithstanding that issue, it is the case, in my view, that Mr. Guité has provided a waiver to this committee and, in companion with that waiver, his assurance he'll be here on April 22.

Am I correct in understanding that notwithstanding the uncertainty as to how his in camera testimony will be made public, nonetheless his waiver is accepted by the committee, the expectation is that he will be here on April 22, and the motion of Ms. Jennings to amend the summons to read April 22 will in due course be carried?

The Chair: Shall we bring that motion forward first before we deal with the publication?

Mr. Rob Walsh: It would give me some comfort to know the record reflects what progress we have made.

The Chair: So we have a dilemma here. Mr. Walsh has pointed out clearly that we have to accept Mr. Guité's commitment to be here on April 22 and 23. We have, as Madam Jennings pointed out, a summons for Mr. Guité to come here on April 1. If that summons is to be changed to read April 22 and 23, the clerk is saying that requires a notice of motion, and therefore it will be 48 hours before we can determine that issue, unless there is consent to waive that. Then it seems that this decision should precede any decision to make the testimony public.

Am I correct, Mr. Walsh?

º (1625)

Mr. Rob Walsh: It would appear correct to me.

The Chair: So we have to make sure we don't get the cart before the horse. It would be quite inappropriate for us, based on Mr. Edelson's letter saying we may make the information public on the condition that we accept his schedule, to make it public if we were unable to make a confirmation that we accepted his coming on April 22 and 23. Therefore, I think we are stymied at this point in time, unless there is unanimous consent.

Hon. Walt Lastewka: Is it April 22 “and” 23, not “or” 23?

The Chair: You have to say both, April 22 and 23, in case we decide to go on the second day.

The law clerk and the clerk advise me that Madam Jennings' amendment to the summons is a substantive change that requires unanimous consent. Is there unanimous consent to deal with that issue now?

Some hon. members: Agreed.

Mr. Vic Toews: No.

The Chair: So there's no unanimous consent to deal with a substantive change at this point in time.

Mr. Mills.

Mr. Dennis Mills: Is the committee saying we are not going to hear Mr. Guité's testimony?

The Chair: No. We have notice of motion from Madam Jennings to change the date of the summons from April 1 to April 22 and 23--

Mr. Dennis Mills: And what stopped that motion from going through?

Mrs. Marlene Jennings: Excuse me, and to release the 2002 in camera testimony of Mr. Guité in accordance with his decision to waive the confidentiality of the in camera hearing wherein he testified.

The Chair: That's the motion, and we have a 48-hour rule. Unless there is unanimous consent, we cannot go forward at this time. There was no unanimous consent, so there it is.

Mr. Tonks.

Mr. Alan Tonks (York South—Weston, Lib.): On a point of order, Mr. Chair, I had given notice of a motion that if Mr. Guité couldn't make it for April 1, you be instructed to report that to the Commons and, on that basis, Mr. Guité be ordered to appear by the Commons. That would be the chain of events.

It did occur to me, on the basis of what Mrs. Ablonczy had said, that we appeared to be in a negotiation. I take the comment she made very seriously, that a committee shouldn't be in such a mode, if you will. I would just like, Mr. Chairman, for you to clarify what the status of my notice of motion is in view of the events that have just occurred.

The Chair: What you have done, Mr. Tonks, is to give us a notice of motion. It would not appear to kick in until April 1, and on that day, if you felt it was appropriate, you could move it. But it is appropriately before the committee at this point in time. If you wish to move it, we can deal with it.

Let me just get my thinking straight here. We were dealing with the issue of Madam Jennings' motion, and the advice I received was that it was a substantive change and therefore required 48 hours' notice. Unanimous consent was not received; therefore, we cannot deal with Madam Jennings' motion until Wednesday at the earliest, this being Monday.

Do you wish to move your motion, Mr. Tonks?

º (1630)

Mr. Alan Tonks: Mr. Chairman, I would hope that it would be perfectly obvious to all, and particularly to Canadians who are watching these proceedings, that this committee is absolutely, irrevocably intent on Mr. Guité being here as soon as possible.

The Chair: That appears to be April 22 and 23.

Mr. Alan Tonks: Absolutely, and to that end, my feeling is that my motion should stand, Mr. Chairman.

The Chair: Let me read your motion. Are you going to move it?

Mr. Alan Tonks: Yes, I am.

The Chair: Here is the motion by Mr. Tonks, dated Friday, March 26:

Pursuant to the motion put forward by the Member for York South--Weston and passed unanimously by the Public Accounts Committee on March 18, 2004 summoning Mr. Charles Guité to appear before the committee as an individual no later than April 1, 2004.

That should Mr. Charles Guité fail to heed the summons of this committee and appear on April 1, 2004, that the Chairman of the Public Accounts Committee be instructed to immediately report this fact to the House of Commons for further action, with the recommendation that the House immediately order Mr. Charles Guité to appear before the committee and that he be made aware of further actions that may be taken by the House should he fail to comply.

That is your motion.

Mr. Dennis Mills: Debate.

The Chair: Do you want a debate? Mr. Mills.

Mr. Dennis Mills: Mr. Chair, you personally were involved in a negotiation this morning with Mr. Guité's lawyer, his counsel. My understanding is that you and others, with our legal counsel to this committee present, negotiated an understanding that came back to us later today, March 29, from Mr. Edelson, where Mr. Guité agreed to come before the committee for the April 22 and April 23 period. So I am just having great difficulty in understanding why we don't accept his willingness to come on those two days and his willingness to waive the confidentiality of the in camera hearings. There is a contradiction at play here.

The Chair: I think I mentioned that one may use conjecture as to why Mr. Guité lifted the ban on the evidence.

Madam Jennings, I will just say this: do you wish for me to put on the record my interpretation of what happened this morning?

Mrs. Marlene Jennings: I'm sorry, I....

The Chair: Mr. Mills was saying that I participated in the negotiations this morning that resulted in the letter from Mr. Guité's lawyer lifting the in camera protection, and I said, do you want me to put on the record my interpretation of what transpired this morning?

Mrs. Marlene Jennings: Why would you ask me that? You're free to do whatever you wish.

The Chair: Let me tell you, Mr. Mills, we were over in a corner of the room.

Mrs. Marlene Jennings: Rob Walsh seems to want to--

The Chair: I talked to Mr. Edelson, but there were too many microphones around, so he, Mr. Walsh, Madam Jennings, and I went outside the room to hear what he--

Mrs. Marlene Jennings: I suggest that Mr. Walsh may wish to say something to you in private.

The Chair: In private or in public?

Are you going to put it on the record? Okay, Mr. Walsh.

Mr. Rob Walsh: Mr. Chair, I feel I need to comment at this point regarding the letter received today, which reflects discussions, as mentioned earlier, between Mr. Edelson, me, you, and Ms. Jennings, that took place in the corridor and that, in fairness, we characterized as a private conversation.

Let me add for the benefit of members, particularly with regard to this motion, that in my judgment Mr. Guité is and will be doing whatever he can to cooperate with this committee. His lawyer has explained to me the current circumstances he's in that make him unavailable to attend here on April 1. Then there is the adjournment for Easter, and that takes us to the week of April 18 or 19, with the result that April 22 became an available date.

These discussions, in fairness to Mr. Guité, ought not to be characterized as negotiations of a kind where Mr. Guité or his counsel are trying to put the committee at a disadvantage. I think Mr. Guité and his counsel at this point are trying to do what they can to accommodate the committee, and this is the arrangement that was made.

Although the initial summons was for April 1, it often is the case with witnesses that staff of the committee try to accommodate witnesses to meet their professional and personal conflicts in terms of scheduling, and do all that can be done to get the body before the committee. That is what was attempted here. Realistically speaking, in my judgment, it was not going to happen on April 1 regardless of whatever process may or may not be undertaken in the House and may or may not prove useful in the long term.

So the discussion that took place on Friday and again this morning concerned the next available date, and that's April 22. I am concerned that any discussion of a kind that puts Mr. Guité in the position of looking like he is trying to extract something from this committee may have an adverse effect on the proceedings of this committee, with the result that its main objective is, if not defeated, hampered.

º (1635)

The Chair: Thank you, Mr. Walsh.

Mr. Walsh characterized the conversation between Ms. Jennings, Mr. Walsh, me, and Mr. Edelson as a private conversation. I would rather keep it that way, and I would rather not be characterized as negotiating with Mr. Edelson. I did not.

You have a point of order, Mr. Tonks?

Mr. Alan Tonks: Yes, Mr. Chairman.

In view of the explanation given by Mr. Walsh, which...and as I indicated, I raised the motion with respect to the concern that had been expressed by Ms. Ablonczy. If it is procedurally correct, I would wish to withdraw the motion in view of that overview that's been given. But if I may, it would appear to me then that since the intent is to have Mr. Guité in as quickly as possible, the committee should get on with the accommodation that has been agreed between you and Mr. Guité.

The Chair: That is exactly what I am trying to do. As I said, we now have the information before us. I asked you whether, based on Mr. Kenney's caution--it wasn't a motion, or I don't think it was, and I am not taking it as such--you want to continue or you want to wait until we have some advice from the Clerk of the House of Commons.

Again, I'll ask that question: do you want to continue or do you want to wait for some advice from the Clerk of the House of Commons?

Let me just get a show of hands, because it is not a motion. Let me get a straw vote so that I can get some direction here. I don't want to make these decisions by myself.

Some hon. members: Agreed.

The Chair: Mr. Kenney.

Mr. Jason Kenney: On a point of order, Mr. Chair, I move then that the committee seek further advice from the Clerk of the House of Commons on the propriety of unsealing in camera testimony given to this committee by Mr. Guité.

I seek unanimous consent to put that motion immediately.

The Chair: I am getting a little frustrated here.

Mr. Kenney has put forth a notice of motion. Now, Ms. Jennings has put forth a notice of motion to amend the order, the subpoena. Neither can be dealt with at this point in time. We will deal with them on Wednesday or Thursday, but they cannot be dealt with before.

Mr. Lastewka, did you have a point, very quickly?

Hon. Walt Lastewka: I just wanted your clarification, because some people are saying points of order incorrectly.

The Chair: Yes, they're using them for debate.

Mr. Jordan is waving his hand--

Hon. Walt Lastewka: I just want to clarify where we are right now. I take it that because unanimous consent was not given to Ms. Jennings, it will now be heard on Wednesday afternoon.

The Chair: That's correct, Wednesday or Thursday. I will bring it forward Wednesday afternoon.

Yes.

Mrs. Marlene Jennings: Mine is Wednesday. Mr. Kenney's would be Thursday, I believe.

The Chair: It's 48 hours....

Mr. Walsh.

Mr. Rob Walsh: I hate to come back to this point again, Mr. Chairman. I appreciate that the motion on notice from Ms. Jennings is a motion to amend the summons, and I'm not entering into that debate in terms of the procedural issue, but am I correct in understanding, for the purposes of communication with Mr. Edelson on behalf of his client, that there is a consensus that, whether it is under a summons or otherwise, April 22 is scheduled for the hearing of Mr. Guité, and possibly April 23 as well?

The Chair: Yes, I think, Mr. Walsh, you can take it that the feeling of the committee is that we will be expecting him here on April 22 and 23, be it by summons or voluntarily. Either way, we expect him here. Okay?

º (1640)

Mr. Dennis Mills: That's clarification. Now, our legal counsel gave us advice too, which we've been following for the last 10 weeks in a very disciplined way, that the documents that were shrouded can now be released.

The Chair: No, they can't be released. We haven't dealt with that yet. We may deal with it on Wednesday, but not right now.

Do we still have Mr. Tonks' motion on the floor? No, he withdrew the motion.

So we've dealt with that issue....

Oh, Mr. Jordan, I forgot about you. I apologize.

Hon. Joe Jordan (Leeds—Grenville, Lib.): No problem, Mr. Chair.

Perhaps I can suggest a way forward. I don't think there's much point in going on with this, because we don't have a motion at the end of this day, right?

On the issue of whether or not we require a House order, the April 1 date is rather critical. If it were possible for you to go to the House and request unanimous consent to get the House order prior to April 1, then I think our problem goes away.

The Chair: I'm not sure I can do that. I can discuss that with the law clerk, but I'm not going to go to the House by myself, as a member of Parliament, without a motion passed by this committee giving me the authority to go to the House and speak on behalf of this committee. So I think we'll just consider the issue closed.

We now have another issue, that if Mr. Guité does not come on April 1--and we know he's not coming on April 1--then we have other witnesses.

I'm going to ask the clerk to tell us the problems that we run into there.

The Clerk: Thank you, Mr. Chairman.

The committee will recall that last Thursday they adopted a motion that Mr. Tonks put forward, stating that if Mr. Guité did not appear on April 1, we would contact heads of ad agencies mentioned in the November report, and that one of the people they would like to have appear would be Monsieur Lafleur, if his schedule permitted.

As soon as we hired the forensic auditors a couple of weeks ago, the first task we gave them was to assist us in locating the heads of some of these agencies. Some of these agencies, as members know, are no longer in business, or have been merged with other groups. We've been having some difficulty locating the principals in that case, and thus contacting them.

To date, as of this afternoon, I have been unable to contact three of those heads of communication agencies. In two cases, I have no contact information despite our best efforts, and in one case, I do have some contact information but have not been successful in making contact with the person in question. In two other cases, I was able to speak with the attorneys of the people concerned. They gave me a number of reasons why they did not feel it was appropriate for their clients to be appearing before a committee while there are legal proceedings going on surrounding this issue, or the potential of charges being laid in the very near future.

So those are the indications I've had from the counsel of two of the people concerned.

Mr. Dennis Mills: Mr. Chair, on that issue--

The Chair: I will hear the clerk first.

Mr. Dennis Mills: I thought he was finished.

The Chair: No, he wasn't.

The Clerk: I was very rapidly approaching the end.

So in my report back to the committee on my attempt to give effect to Mr. Tonks' motion, or pursuant to that motion, I've been largely unsuccessful in securing a witness to appear on Thursday, someone who was the head of an ad agency mentioned in the Auditor General's report.

The Chair: Let me say that the clerks have been working as diligently as they can to fill that vacancy, so any allegations to the contrary, I think, would be out of order and untoward.

He did mention two people we would wish to speak to who, for reasons of the nature of the investigation, would prefer that they didn't come forward at this time. Again, the committee should think seriously about that, because if we're having public testimony and causing them to answer questions in public, we all know that privileged testimony can affect the police investigation. So bear that in mind as you make your decision.

The question I have for you is, do we subpoena somebody to come forward on Thursday so that we can demonstrate to the country that we're extremely diligent, or do we just continue on to try to find somebody—and if we can't, there'll be no meeting?

Mr. Dennis Mills: Mr. Chair, I have a list of the agencies that received this $85 million, separate from production fees.

Am I to understand from the clerk that you've approached Gosselin, Everest, Lafleur, Palmer Jarvis, Vickers, Compass, Coffin, Groupaction, Publicité Martin, or all of these agencies, and no one wanted to come forward from these agencies? Is my understanding correct? These are the people who got the so called $85 million.

º (1645)

The Chair: Yes, the clerk will answer.

I don't think that you were at the in camera meeting, Mr. Mills, where we decided on our priority list, but I'll ask the clerk to tell us who he contacted.

The Clerk: The indication I was given was that there were five agencies in question: Groupaction, Coffin, Groupe Everest, Lafleur, and Gosselin. Those are the ones I've been attempting to contact, with varying degrees of success.

The Chair: I think that because this is Monday, and Thursday is not far away, I will ask both clerks to continue as diligently as they can to widen the number of people. In fact, we have contacted some ministers as well to see if they can come forward. We're doing the best we can to get witnesses, and if we can, there'll be a meeting. If not, we'll advise you accordingly.

As for the other notices of motion we should deal with, there is a notice of motion by Mrs. Diane Ablonczy, dated March 24: “That this Committee requests that the Government table all minutes, or documentspertaining to the Ad-Hoc Committee of Cabinet on Government Communications,without exception.”

“Without exception” is pretty broad, Madam Ablonczy. Do you want to move your motion, or do you want to amend or restrict it, or keep it as is?

Mrs. Diane Ablonczy: Mr. Chairman, I had understood that all such documents would be reviewed by the law clerk for relevance, and that relevant documents would then be referred to the committee. Is that the case?

The Chair: You didn't say so in your motion. I thought that we would have it in the motion if there was to be a filter by the law clerk. I don't think we're going to have him filter every motion or every document, but only the ones that we feel required prudence; so I think it would be appropriate if you want to add that.

Mrs. Diane Ablonczy: I'm not sure we need to add that. The ones I was intending were those, of course, relevant to this inquiry of the sponsorship program, and if that's not clear, then we should make it clear—but that was my intent.

The Chair: Yes, Madam Jennings.

Mrs. Marlene Jennings: First of all, I think it might be wise in the future for all members of the committee—including all Liberal members—when tabling a motion, to begin the motion by citing our mandate, pursuant to Standing Order 108(3)(g), chapters 3, 4 and 5 of the November, 2003 report of the Auditor General of Canada, referred to the committee on February 10, 2004. I think it's important that all motions begin like that.

So if one takes the motion of Mrs. Ablonczy, then it would be pursuant to what I have just read out, and “That this Committee requests that the Government table all minutes, or documentspertaining to the Ad-Hoc Committee of Cabinet on Government Communications,without exception.”

The Chair: Madam Ablonczy, is that acceptable?

Mrs. Diane Ablonczy: Yes, it is.

Thank you, Madam Jennings.

The Chair: I will also point out that I am going to have all motions vetted by the auditor for the point Madam Jennings raised, to make sure there isn't duplication, and so on and so forth. We'll try to get some order here.

Is there any debate?

Mrs. Marlene Jennings: I beg your indulgence. If all members agree, can we take it as a given that the clerks understand that they will automatically include all subsequent motions, whether they have them or not, in the motion?

The Chair: I will not introduce them here until they're in that format and have been cleared by the auditor. Therefore, you know there are restrictions on motions and you have to move them through the process. The process is that you have that preamble, and you clear motions with the auditor to ensure you are not duplicating something that has already been done.

Is there any further debate?

Hon. Robert Thibault: Can we assume that all motions presented today will have that wording added?

The Chair: Yes, they will have that preamble added.

(Motion agreed to)

The Chair: I have another motion by Ms. Ablonczy, again with the preamble that Madam Jennings put forward: “That this Committee request the Government provide the mandate of the former Ad-Hoc Committee of Cabinet on Government Communications.”

(Motion agreed to)

The Chair: There is a notice of motion by Mr. Peter MacKay, again with the preamble of Madam Jennings: “That this Committee requests that the Government provide all correspondence received by any Minister (public servant or departmental office) from Groupe Everest or Groupaction, Lafleur Communications, or any subsidiary that may exist or have existed under a different name or registered entity, without exception.”

º (1650)

Ms. Beth Phinney: I thought you just said you weren't going to do this one because he wasn't here.

The Chair: Yes, but they waived that. They said it was introduced by somebody else.

Ms. Beth Phinney: Who waived that?

The Chair: Mr. Jordan said it was fine.

Does anybody object to Mr. MacKay's motion now before us, as I read it? It is now before us.

(Motion agreed to)

The Chair: There's another one by Mr. MacKay. Is there unanimous consent to deal with this motion?

Some hon. members: Agreed.

The Chair:Again with Madam Jennings' preamble, it says: “That this Committee requests that the Government provide the curriculum vitae for the Ministers of Public Works from 1993 to 2004.”

(Motion agreed to)

The Chair: There's a motion by Mr. Toews, again with Madam Jennings' preamble: “That, the Government provides the Standing Committee on Public Accounts the names of recipients on all documentation (including authorizations) pertaining to funds spent on the National Unity Fund from 1996 until 2004.”

Madam Jennings.

Mrs. Marlene Jennings: I don't understand this motion. If I'm not mistaken, this committee unanimously adopted a motion that the committee would sit on April 13 to hear witnesses, and on April 14 to receive a first draft report from our researchers. If I'm not mistaken, Mr. Toews signed that. That was the agreement between my motion and his motion.

The Chair: Madam Jennings, I think you're talking about the next motion, which I have not introduced.

Mrs. Marlene Jennings: I thought we had already adopted the unity one.

The Chair: No.

Is there any debate on Mr. Toews' motion?

Mr. Vic Toews: Just on a matter of clarification, it should say, “spent from the National Unity Fund”. We're not spending it on the National Unity Fund.

The Chair: I agree with that minor editorial amendment.

(Motion agreed to)

The Chair: Next is Mr. Toews' second motion, again with Madam Jennings' preamble: “That the Standing Committee on Public Accounts requests that the Clerks, Law Clerk, Library of Parliament Researchers and all other staff supporting the committee, prepare a submission during the week of April 12 to 16, 2004, which summarizes all testimony and witnesses heard by this committee regarding the committee's investigation into the Sponsorship Matter.”

Madam Jennings.

Mrs. Marlene Jennings: If my memory serves me correctly, Mr. Toews presented this motion subsequent to a motion of which I had already given notice; therefore, my motion came up first for debate and, ultimately, a vote.

My motion called for the committee to sit on April 13 and 14 for the sole purpose of hearing witnesses. Mr. Toews' notice of motion for this, as everyone can read, was to request the law clerk to prepare a submission during the week of April 12 to 16. At that point, Mr. Chair, you suggested that if I were agreeable, seeing that there seemed to be some duplication, Mr. Toews and I should attempt to come to an accommodation. Rare though it may be for a Liberal to come to a meeting of the minds with a Conservative, we did achieve that. It was a success.

Mr. Toews and I agreed that I would amend my motion so that it would read that the committee sit on April 13 for the sole purpose of hearing witnesses and on April 14 to receive a draft first report from our researchers. I wrote it out and read it here. You asked if there was consent. It was unanimous. The clerk then came up to me and said, for greater surety, would I please write it out. She had me sign it. I believe she took it and showed it to Mr. Toews. The agreement was that Mr. Toews was going to withdraw his motion because we agreed to amend my motion. It is a duplication.

º (1655)

Mr. Vic Toews: As a matter of clarity, we don't want to spell out every detail in the motion, but my understanding from my conversation with Ms. Jennings was that the report would consist of a summary of the testimony and witnesses heard by this committee. That's certainly my understanding.

The Chair: It seems to me that Madam Jennings is perfectly correct, she did introduce a motion. Mr. Toews, you have this other motion here. I am going to discuss this motion with you and others and bring it forward on Wednesday as a second, because I don't think we should deal with it today.

Mr. Tonks, you have withdrawn your motion.

Ms. Jennings, we've deferred your motion.

Mrs. Marlene Jennings: Are you talking about the second motion I gave notice of on March 26?

The Chair: Yes. That one I said we have to defer because we cannot deal with it today. Your motion regarding adducing documentation has already been carried.

Mrs. Marlene Jennings: Yes, I understand that. Thank you.

The Chair: That takes care of the notices of motion. Remember that you have to clear them with the auditor before I will entertain them and read them here.

An hon. member: Auditor or law clerk?

The Chair: The clerk will defer to the auditor to make sure you're not asking the same thing or whatever.

We will now have a five-minute recess.

» (1700)

The Chair: We have enough people to hear testimony, so we're back in session.

Ms. Phinney, you are the first, followed by Madam Jennings. Because of the short time we have, I will go with three Liberals, and government members will likely call it a day.

Mr. LeBlanc.

Mr. Dominic LeBlanc (Beauséjour—Petitcodiac, Lib.): During the break there was some confusion as to your comments with respect to hearing motions on Wednesday or Thursday that we received notice of today. I would like your clarification that for Madam Jennings' motion, for example, with respect to amending the summons and releasing the testimony, notice was properly given today and we could hear it Wednesday. Is that correct?

The Chair: That's right. If the committee decide they don't have time, they'll push it over to the next day, and then it will be on Thursday. I'll introduce them on a Wednesday, and if the committee decides to deal with them, we'll deal with them.

Mr. Dominic LeBlanc: So you will bring the motions on Wednesday?

The Chair: I will bring them on Wednesday, yes.

Ms. Phinney, eight minutes.

Ms. Beth Phinney (Hamilton Mountain, Lib.): Thank you very much, Mr. Chairman.

Mr. Steinberg, thank you for coming. I'm sorry you've had to wait all afternoon.

First, could you just tell us, as director general, what your qualifications are? Are you a chartered accountant, an auditor, or what?

Mr. Norman Steinberg (Director General, Audit and Ethics Branch, Department of Public Works and Government Services): I have a master's degree in social work and I'm a certified fraud examiner. I have about 25 years of experience in the business of auditing and evaluating government programs.

Ms. Beth Phinney: But you're not a chartered accountant or an auditor?

Mr. Norman Steinberg: No, I'm a certified fraud examiner.

Ms. Beth Phinney: The directors who work under you, what are their qualifications? Are they audit technicians, chartered accountants, or auditors?

» (1705)

Mr. Norman Steinberg: The director of internal audit has an accounting designation. We don't have a director of internal audit at the moment; we're in the process of rehiring. The general audit team would be an amalgamation of CGAs or CMAs or CAs. So there is a depth of experience there.

Ms. Beth Phinney: Thank you very much.

Whether it's an internal or external audit, you follow, presumably, the audit trail--I won't ask you to go through that, because I know it's quite lengthy--until you find the higher-up who initials all the outgoing cheques. Who was the signatory of the sponsorship cheques?

Mr. Norman Steinberg: Let me clarify something first. Internal audit has a number of functions. When we talk about internal audit in government, we're fundamentally talking about--I think Ms. Fraser talked about it too--processes, structures, or management control frameworks. In that context, sometimes internal auditors might look at management structures.

I don't specifically recall who was signing cheques in the 2000 period. Is that when you were asking about?

Ms. Beth Phinney: Yes, or any time you know about.

Mr. Norman Steinberg: It's my understanding that because of the lack of segregation of duties, the executive director or the acting executive director was ultimately involved in the signing of cheques.

Ms. Beth Phinney: Mr. Guité?

Mr. Norman Steinberg: I believe so, but I'll get back to you with specifics.

Ms. Beth Phinney: Could you let us know who was signing the sponsorship cheques? Could you give the information to the clerk?

Mr. Norman Steinberg: Absolutely.

Ms. Beth Phinney: You mentioned that you saw at various times from, I presume, when you started until you finished various seeds of problems. Can you give us an example of an area of significant risk related to asset management or the protection of assets that you have reported to management, with your reasons why they are a problem, that they have acknowledged and undertaken to correct, or maybe said they won't do?

Mr. Norman Steinberg: Are we talking here about the original internal affairs investigation, the Ernst & Young audit on sponsorship, or more generally about the audits we do?

Ms. Beth Phinney: More generally about the audits you've done, where you had an area that was particularly at risk and you recommended that they do something about it.

Mr. Norman Steinberg: I will table the internal audit I mentioned in my outline this morning, but for example, we looked at the regime Public Works has in place to ensure that the bridges and dams we have custodial responsibility for are safe. We concluded that the regime needed improvement.

Ms. Beth Phinney: Could we get it back to the sponsorship program? Was there anything in there you saw as being a risk and recommended that they do something specifically about?

Mr. Norman Steinberg: For example, Ernst &Young, who did the report on our behalf, had several findings with respect to the weakness of the control systems. As I said in my testimony this morning--

Ms. Beth Phinney: What do you mean by “control systems”?

Mr. Norman Steinberg: Control breakdowns?

Ms. Beth Phinney: Yes.

Mr. Norman Steinberg: I believe at the time, if I'm recalling Ernst & Young correctly, they had concerns that the people who were responsible for giving procurement advice per se didn't have that expertise. I could go back to the report to recall it.

I think the 2000 internal audit report was pretty clear in terms of control weaknesses we found. On page 12 of the report, it says, for example:

Although CCSB maintains an inventory of sponsorship files, there was little documentary evidence to justify the decision taken....

Although sponsorship approval is to be based on a positive assessment of a sponsorship proposal, proposals were only evident for approximately 25% of the files reviewed....

Although CCSB is to send a letter to notify sponsorship recipients of the amount approved and the CA which will manage...these decision letters were only evident for...25% of the files reviewed.

Ms. Beth Phinney: Okay, that's fine. I just wanted an example of that.

What recourse does an internal auditor have to address the failure of management to deal with significant risk that is not being attended to by the management?

Mr. Norman Steinberg: I think we have to remember what internal auditors do in the public sector and in the private sector. Their responsibility is to raise, as quickly as possible, given the management risk, the nature of the risk so that management can act decisively to put the changes in place that the auditor brought forward.

That's done at the most senior level in our department by the audit and review committee. There you have the deputy minister as the chair, you have the senior ADMs and the chief financial officer, and they then take the decision. They decide that is the action plan that will be followed. Unless it's an audit that we've done where health and safety is an issue, we won't do a follow-up review probably for about three years, when we come back through the cycle and begin once again to audit the 130 audit entities.

» (1710)

Ms. Beth Phinney: I'm taking from your answer that there is no recourse for that. You can't go to the Auditor General, you can't go to the Treasury Board, I guess, and say, “We've done an audit and this is really bad, and we're losing a lot of money”, etc. I'm just asking if you, as the internal auditor, have any place you can go if it's not working within your department.

Mr. Norman Steinberg: If there is a result of an internal audit and there is a management plan put in place, and the management is not following up, and I've been directed by the audit and review committee to go and assess the follow-up and it's not being done, my recourse is to go, today, to the audit and ethics committee--in those days to the audit and review committee.

Ms. Beth Phinney: In your own department?

Mr. Norman Steinberg: Absolutely. As the Treasury Board policy on internal audit has been set up, internal auditors are accountable to the deputy ministers of the department. That's the theory for internal audit functions, with the understanding and the recognition that the legislative auditor or the external auditor reports to Parliament.

Ms. Beth Phinney: Okay, I think it sounds like there is no place for you to go and that this problem that is a risk will just sit there.

We're charged here with finding out why and how these problems occurred and to find ways to resolve them. Do you have any suggestions as to how, if something is recommended to somebody higher up and it's not happening, we could make sure it does happen?

Mr. Norman Steinberg: Well, first of all, I disagree with the premise of the question, that I have nowhere to go. Where I can go, where auditors in the Government of Canada can go in well functioning departments, where deputy ministers sit as the chairs of the audit and review committees--that's the management function. That's the same management function as you have in the private sector. That's the most--

Ms. Beth Phinney: Can I interrupt again, then?

Mr. Norman Steinberg: No, don't, please, I'd like to finish. That's the most significant place where auditors need to go.

The Chair: That is time.

Ms. Beth Phinney: Could somebody else follow up, then?

The Chair: Well, I think we can expect that we'll be asking Mr. Steinberg to come back on Thursday.

Madam Jennings, please, you have eight minutes.

Mrs. Marlene Jennings: Mr. Chair, I'll be splitting my time with Mr. Mills.

Mr. Steinberg, I basically just have one question. You were asked earlier today whether, when you gave the verbal report of the 2000-01 audit to the Minister of Public Works at the time, the minister had asked if the police should be called in. You said you do not recollect that question being raised--the question of calling in the police.

Given your testimony today as to the findings of that internal audit that you presided over--that it was grave, it was serious, and that many of the findings were virtually identical to or the same as those of the Auditor General in her subsequent audit--had you been asked the question at that time, should the police be called in, what would your answer have been? Would it have been what you've just told us today, with the knowledge that you had then for the audit? It would have been no?

Mr. Norman Steinberg: First of all, Ms. Jennings, let me say that I didn't brief Mr. Gagliano simply in an oral way. I briefed him from text, which I left with him, plus he had the report.

Now, to answer your specific question, there were no allegations made of illegal or criminal activity at the time. Again, we have in my branch a director of fraud investigation and prevention who is a former RCMP investigator; he's a certified fraud examiner. There are other people in that branch who are former RCMP officers. We went to them and asked them, “In your view, given the evidence, is there anything fraudulent?” And they said no.

The contracts were poorly structured. During and after the audit, there was one file that we consulted with Justice Canada, on a matter of invoicing. Justice Canada advised us that the matter was not criminal and was not contrary to the clauses of the contract.

So as an auditor at the time, I believe that I really did my due diligence. It's 2004 and—

» (1715)

Mrs. Marlene Jennings: May I interrupt you.

I am not at all questioning your due diligence. I simply wanted to bring clarity, because Mr. Gagliano, in his testimony, said that when he was provided with the report, he asked, “Should I call the police?” He was told no, that “There is no criminal evidence”.

Mr. Norman Steinberg: That's right.

Mrs. Marlene Jennings: You are now testifying that had you been asked the question, you would have said, “Our expert fraud—”

Mr. Norman Steinberg: It's a hypothetical that you're asking me. What I am telling you is that at the time, there was no illegal or criminal activity evident.

Mrs. Marlene Jennings: Thank you.

The Chair: Thank you, Mrs. Jennings.

Mr. Mills.

Mr. Dennis Mills: My questions are very short—and I'm happy that you're coming back again on Thursday.

On page 6 of your key findings, Mr. Steinberg, in your second point, you state that “The sponsorship approval and decision-making process is subjective and based on professional judgement and experience”. What does that mean?

Mr. Norman Steinberg: I think what the auditors were saying at the time was that there were no clear criteria or guidelines in place, even though they were drafted.

What they were told—to quote from the report—was no, we don't have criteria, we're using our professional judgment. Then based on that, they didn't document what the basis of their professional judgment would be, so that we could put ourselves in their place and go through the same process and say, okay, based on your professional judgment, that award makes sense, or that award doesn't make sense.

Mr. Dennis Mills: Okay, fair enough.

Then I would like to ask you this question: on the 1,987 events that happened, did you ever ask for any impact analysis on those events, to see whether or not the auditors' professional judgment and experience did in fact bring value for money to the taxpayers of Canada?

I ask you that, Mr. Steinberg, because I want to be right up front with you. I have asked that of several organizations who participated in this sponsorship. They have informed me that they do have impact analysis, and that they use it not just for the first year they got sponsorship dollars, but that also, by showing value for the taxpayer, they hope they can prove that the investment in sponsorship dollars would ratify support for a second year, etc.

So I'm just wondering, how much impact analysis work was done by the auditing team?

Mr. Norman Steinberg: First of all, I'm not sure where the 1,900, or whatever, number comes from. We looked at 580 files in the end, which represented all the sponsorship events CCSB said had transpired between June 1997 and March 2000.

Mr. Dennis Mills: Okay, fair enough.

In that period, did you do any impact analysis?

Mr. Norman Steinberg: The auditors looked at—

The Chair: I think the question, Mr. Mills, is not that they don't do impact analysis, but that they seek to verify impact analysis information.

Mr. Dennis Mills: No, my question, Mr. Chair, was if they had ever sought out any impact analysis on those jobs to show whether or not those investments by the taxpayer in certain sponsorship programs brought a return for the taxpayers' dollars, or to the country.

Mr. Norman Steinberg: The answer to that is no. Why? Because there was no documentation in the file that would have allowed any kind of analysis of the individual sponsorships that were being given either by the AOR, Media/IDA Vision, to the communications agencies or directly sometimes from CCSB to the communications agencies.

Mr. Dennis Mills: You couldn't find those files?

Mr. Norman Steinberg: They just didn't exist. That is the sad situation in many ways, that the minimal documentation you would expect to be on a file didn't exist, wasn't there. That's the basis of management.

» (1720)

Mr. Dennis Mills: Thank you.

Is that my time, Mr. Chair?

The Chair: You've got one minute left.

Mr. Dennis Mills: Thank you very much, Mr. Chair. I'll take advantage of that one minute.

Today we received written testimony from Public Works and Government Services identifying $70 million of production costs, not fees, up to the year 2000. Have you seen that letter, Mr. Steinberg? There's a perception in the Canadian public right now, and it's being fostered a lot, of course, by certain opposition members, that $100 million went missing out the back door. You've had a chance to audit this. What is your position on the perception that is out there, knowing what you know from doing the audit on these 561 events?

Mr. Norman Steinberg: Given that I work in a facts-based world, I can't have an opinion, because there are no facts to support where that money went and where it was spent. If somebody could come forward with documentation to show how those sponsorships were funded and where the money went, somebody could make an objective and independent assessment as to whether or not there was value for money.

The Chair: Thank you, Mr. Mills.

Mr. Thibault.

Hon. Robert Thibault: Thank you very much, and I thank you for appearing and clarifying a lot of information for us. I think it's been very useful.

We understand that there were a lot of production costs. There are a lot of instances where we don't know where the money went. It's not necessarily that the money disappeared, but that the processes in place weren't adequate to track it. So I'll try to get back to a few of those.

First, when the Auditor General reported, she pointed out that a lot of rules were broken. When Ms. Tremblay was here, she pointed out that there were no rules broken, because no rules existed. From your experience, where would you come in?

Mr. Norman Steinberg: My take is that there were rules. There were the PCRs, the government rules on contracting, there was Treasury Board policy, there were a number of administrative processes that define the way in which all public servants work. It's the water they swim in. So I think the rules were there, but people said, we're not covered by those rules, we have some sort of dispensation, for whatever reasons, and they proceeded to go the way they did.

Hon. Robert Thibault: Would you agree that the Financial Administration Act forms the base for all regulations applying to the administration of programs within the civil service?

Mr. Norman Steinberg: Clearly, the Financial Administration Act is the foundation upon which all governance in the Government of Canada operates. When those rules are ignored, we see the results. They're fundamental.

Hon. Robert Thibault: So the Financial Administration Act in this case would itself have been broken.

Mr. Norman Steinberg: I believe the audit and the Auditor General found that there were clear violations of the Financial Administration Act.

Hon. Robert Thibault: So when Madam Tremblay said there were no rules, that would certainly be an exception. She did speak of loose guidelines, however. I assume that when she's speaking about loose guidelines, she's talking about the more substantive, more program-oriented side, rather than the financial side, of the program.

Mr. Norman Steinberg: I separate out two things. As I said before, there's the new and the old testament, which is the Financial Administration Act, the government contracting regulations, and a number of others. Using those as a foundation, departments may develop management structures or regimes, but they're built on that foundation. You ignore those rules at your peril. One could argue that what we have today is a consequence of people ignoring those fundamental rules.

Hon. Robert Thibault: Which brings me to the question you mentioned in your presentation, that there was a breakdown of controls that you'd expect to see in a government program and a breakdown in the application of the Financial Administration Act, which would in a sense be one and the same or at least very closely related. Who would have the responsibility in the department for the administration or for ensuring that the controls don't break down in the Financial Administration Act? Who would be ultimately responsible in the department?

» (1725)

Mr. Norman Steinberg: Well, let me say first who is responsible. I'm the director general of the audit and ethics branch. I have $6.2 million of taxpayers' money to manage. I'm responsible. I'm responsible to make sure that the rules are followed and complied with. And that's the best defence we have: we make managers directly accountable. Ultimately, in the highest and ultimate sense, it's the Treasury Board that establishes the policy regimes, the rules by which we all operate, and they have to monitor and make sure the rules make sense for the contemporary world in which we operate. So rules that were made perhaps in 1970 would need to be modified, and that's their role.

But you know, I'm an auditor, so I'd say the ultimate accountability is with the individuals who have been delegated the responsibility. It doesn't have to go any further than that.

Hon. Robert Thibault: That's right, and that delegation, in the case of a line department like Public Works, would be done by the deputy minister?

Mr. Norman Steinberg: I'm not an expert on the delegation instrument, but actually the delegation starts from the minister, through the deputy minister, and then down into the organization.

Hon. Robert Thibault: Would you not agree that the minister's level would be more or less on policy rather than administrative? The minister won't set up the systems; he won't appoint directors; he won't task directors.

Mr. Norman Steinberg: Absolutely, but we're talking about a particular nature of delegation that has to do, for example, with signing authorities--that flows from the ministerial level down. In our system of government it is the public service in general that establishes its own structure based on the rules by which it operates, adapts contemporary management principles that are effective, and like private sector entities, adjusts as it learns from the challenges.

Hon. Robert Thibault: And that would be the basis for what we know as a professional civil service, as opposed to other systems that would have elected--

Mr. Norman Steinberg: Absolutely.

Hon. Robert Thibault: I want to go a little further--

Mr. Norman Steinberg: Can I just say, then, that there is joint responsibility for this--those who establish the policy frameworks, those who establish the management regimes within the public service, then those within the departments who take those general management regimes and adapt them. So in principle, you would see the same management regime, whether it's in NRCan or Transport Canada, but you would see variants depending upon what program is to be managed. If it's a navigation system, you'll see differences in the way it operates from what you might see in a grants and contributions program.

Hon. Robert Thibault: And the commonality would be the Financial Administration Act and Treasury Board guidelines.

But I'd like to come to another point, the question of the political will. It was interesting, because some people raised the question of political will on the part of the minister who was there at the time, Mr. Gagliano.

You mentioned the fact that you audited a significant number of files--you didn't do 100%, but you had a very large sample, statistically speaking; I think you did over 40%--and that the minister would have asked or suggested that you go on to do all the files. Had you done that, you certainly would have included the Coffin files, the Groupaction files, and all other files that have come to be quite controversial.

Mr. Norman Steinberg: I want to correct you. Initially we did 276 of the 580 files. That represents 100% of contracts over $25,000 or whatever. When I met Mr. Gagliano in his office that day, on September 25, he asked us to do 100% of the files, which is all 580.

For example, the Groupaction files that Mrs. Fraser investigated were not part of that 580 because they were not defined as sponsorship. The way the audit worked is that we went to CCSB at the time--I didn't personally, but the audit team did--and said, give us all your sponsorship files, and they plunked down 580. And we said, are you sure these are all the sponsorship files? And they said, that's it; those are all the sponsorship files.

That became the basis, first for the original sample, and then for the 100%.

» (1730)

The Chair: Thank you very much, Mr. Thibault.

I have a couple of questions, Mr. Steinberg.

I'm quoting here from Mr. Gagliano's testimony: “I have to say that I was very upset when I got an interim report for the internal audit of 2000. In the middle of the audit they came to see me. I was very upset.” What's this interim internal audit report in the middle of the audit? Are you aware of that?

Mr. Norman Steinberg: No, Mr. Chairman.

The Chair: You are not aware of an interim report?

Mr. Norman Steinberg: I only met him once, on the sponsorship audit, and that would have been September 25, at which time--

The Chair: You gave him a copy of the final report.

Mr. Norman Steinberg: Yes. On August 16 the audit and review committee had concluded and had approved the audit report.

The Chair: Second, I quote from your opening remarks this morning: “But we also conduct audits on a risk basis, in other words, when a specific risk or problem has been identified, or when a problem is extremely complex or has a high dollar value.” After the 1996 audit, which had some serious problems, did you not consider that to be a high risk and therefore go back to see what was going on?

Mr. Norman Steinberg: We are talking about July 1997, when we would have tabled the Ernst & Young audit at the audit and review committee. No, actually, because when you think about what else we were auditing at that time, the audit and review committee thought they had sufficient information. The Ernst & Young audit had reaffirmed Mr. Cutler's allegations. There was a pretty reasonable action plan in place, and had that been followed, as I said in my testimony this morning, many of the seeds of that would not have been allowed to sprout in 1997, 1998, and 1999.

The Chair: But when the audit committee talks about the report--there you are, you've got the Ernst & Young report, we've all read it, it's got some serious problems contained in it, and there's an action plan to say fix this, that, and the next thing--do you just say, thank you very much, I am sure they'll look after it, or do you go back and say, are you really doing this? Did the audit committee not say, let's follow this? Was this kind of problem with an audit report a general situation? Because I think you mentioned today that 95 issues were referred to the RCMP, and I understood these were outside the sponsorship program.

Mr. Norman Steinberg: What I said to you today was that there have been 238 investigations based on people coming forward, and of those 99 have been referred to the RCMP.

The Chair: That was totally within the sponsorship program.

Mr. Norman Steinberg: Oh, absolutely not. That is just generally speaking.

The Chair: Right across the department?

Mr. Norman Steinberg: Yes. My point really was that we are not afraid to refer problems to the RCMP, and we have expertise in knowing what the threshold is for referring them.

The Chair: So the Ernst & Young audit didn't even meet the threshold--this is a big deal and we'd better look after it.

Mr. Norman Steinberg: The Ernst & Young audit, according to my recollection, didn't raise any illegal or criminal activity. In fact, we struck the terms of reference to ask, if there are issues of non-compliance, please go and look at whether or not there is personal benefit or gain. So Ernst & Young came back and said they hadn't found any, and they certainly were directed to look at it.

The Chair: Okay.

I think there is agreement among the committee, Mr. Steinberg, that you come back at 9 o'clock Thursday morning. We look forward to your coming back. We thank you so much for coming forward. We will start with Ms. Ablonczy at 9 o'clock, because to balance out the day, with a short afternoon, I brought three members of the government side on board.

Mr. Thibault.

Hon. Robert Thibault: I was wondering, Mr. Chair, if we should release the witness or it is absolutely necessary that we bring him back, in light of the fact that we want to hear from quite a number of others.

The Chair: I've just started, and I have a few questions. I would like to see him back, and I think there was general agreement earlier on that.

Ms. Beth Phinney: The clerks are looking for people to come in on Thursday. If you get two people to come in on Thursday, what are you going to do?

The Chair: We'll do our best to bring people in on Thursday, but Mr. Steinberg, I think you're on notice to be here at 9 o'clock just in case.

Point of order, Mr. Kenney.

Mr. Jason Kenney: Mr. Chair, could members of the committee get copies of the letter to you from the clerk regarding the advisability of seeing in camera testimony, for our information?

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The Chair: That was a letter to Ms. Jennings, with a copy to me. It has been distributed.

This meeting is adjourned.